Flat-Base Breakouts on Heavier than Normal Volume Message Board

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Strategies & Market Trends : Flat-Base Breakouts on Heavier than Normal Volume

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To: DD™ who wrote ()	6/7/1998 2:55:00 PM
From: rakitup	Read Replies (1) of 34

If you would like a good example of a firm breaking out of a trading range (basing) right now look at Walgreen (WAG - NYSE). It went through a similar basing period until November and is up 10 since then. After last weeks breakout on Monday we had four higher closes through Friday and the options have gotten going in volatility. Monday may be the perfect day to buy calls for a 1-3 week hold, but you'd have to buy the next quarter out to avoid time decay. Stock is trading at its 52 week high, and if it can get to 47 it will be clear sailing (no upside resistance). PE is about 40, which seems high for the sector but the company is on a roll. After a cup with handle formation in January the shares went straight up for 6 weeks. Does history repeat? Rak up a winner.

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